Manheim Consulting Blog

Helping customers accelerate their business performance

Since 2005, Manheim Consulting has conducted research and performance studies for the company’s largest dealer and commercial clients, while providing a broader perspective on the industry at large for those who follow the automotive sector. Our team leverages our industry-leading data set to illuminate new remarketing trends, optimize location or sales channel utilization, benchmark client performance against peers, publish studies on leading practices, and bring macroeconomic trends into remarketing context.

Manheim Used Vehicle Value Index

Wholesale Prices Slip in February

The number of vehicles entering wholesale channels grew significantly in February. Meanwhile, retail demand, save for the CPO segment, leveled off. Yet, wholesale prices remained above trend by most measures. Chalk it up to manufacturer pricing discipline on the new vehicle side and good inventory management by dealers on the used vehicle side.

Used Car Market Report

The Manheim annual Used Car Market report examines the economic underpinnings of the entire used vehicle market and sector-specific trends that influence the supply and pricing of used vehicles.

This report highlights market conditions and buyer and seller strategies within the used vehicle marketplace, provides an update on digital and mobile technology developments. It also includes an annual look at the various industry components, including dealer, rental, repossessions, leasing, and salvage.

Impact of Delayed Titles at Auction

Roughly 35% of all vehicles at auction are sold without the physical presence of a title. When broken out by seller type, over 90% of all commercial sales are conducted with a title, while only 42.3% of dealer sales are. The seller must announce lack of title as the car runs down the lane, or on the online posting, so the buyer’s awareness of the absence may affect the sale and auction performance. This study found that conversion rate more than doubles when the physical title is present.

Manheim Consulting Blog

Publications

Manheim Consulting clients have improved their remarketing performance by challenging our analytical staff. Read the conclusions of just a few of these in-depth studies.

Auto Industry Brief

March 2015 Auto Industry Brief
March Madness, indeed! The Federal Reserve performed a kabuki dance in a house of mirrors, and analysts saw what they wanted to see. And equity markets lifted on the belief that Euroland’s problems could be papered over. Given this, we find our economic outlook scarily close to the consensus view, but believe there is an unhealthy disregard for the downside risks.

February 2015
Simple momentum should be enough to keep the economic backdrop favorable in the near term. Labor market and credit conditions remain very positive — and these are forces that don’t turn on a dime. The housing market, which slightly disappointed last year, is unlikely to meaningfully accelerate this year.

January 2015
After five years of mediocre growth, the champagne cork was popped when employment gains last year came in just shy of 3 million (the fastest pace since 1999) and pump prices dropped below $2 per gallon in most states.

August 2014
The U.S. economy is a duck in the water. Appearances suggest it is moving slowly and serenely toward a planned destination.

June 2014
It's time to "roll out those lazy, hazy, crazy days of summer." And they will indeed be lazy (continued subpar economic growth), hazy (no definitive directional turns), and crazy (think "not normal" as opposed to "new normal").

Garff Auto Group's Dealer Trade Network
Garff wanted to ensure that the right vehicles were at the right dealerships so that more vehicles were sold at retail vs. sending aged inventory straight to the wholesale environment.

Presentations

Tom Webb is a frequent speaker at automotive and economic conferences. His PowerPoint presentations enable the reader to understand the impact of macro trends on the vehicle markets. Please visit this website periodically to view Tom's latest presentations.

Rental Detail ROI
Manheim Consulting determined the ROI on varying levels of detail service: no detail, wash and vac, and full detail.

Effects of Color on MMR Retention
This study examines if color impacts auction results, which is important to rental and other fleet consignors as these companies have a degree of control over their inventory.

Quarterly Conference Call

Next Conference CallApr 7 at 11am ET

You are invited to join Tom Webb, chief economist for Manheim and the compiler of the Index, as he discusses the major economic and industry trends that have shaped the quarter. Tom will also take your questions following the presentation.

Manheim Consulting Blog

Manheim Used Vehicle Value Index

By applying statistical analysis to its database of more than 5 million used vehicle transactions annually, Manheim has developed a measurement of used vehicle prices that is independent of underlying shifts in the characteristics of vehicles being sold.

The Manheim Index is increasingly recognized by both financial and economic analysts as the premier indicator of pricing trends in the used vehicle market, but should not be considered indicative or predictive of any individual remarketer's results.

Wholesale Prices Slip in February

Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) declined in February after increases in each of the previous four months. This put the February Manheim Used Vehicle Value Index to a level of 125.1, which represented an increase of 1.5% from a year ago.

The number of vehicles entering wholesale channels grew significantly in February. Meanwhile, retail demand, save for the CPO segment, leveled off. Yet, wholesale prices remained above trend by most measures. Chalk it up to manufacturer pricing discipline on the new vehicle side and good inventory management by dealers on the used vehicle side.

February new vehicle sales: a slip or a pause? New cars and light-duty trucks sold at a seasonally adjusted annual rate (SAAR) of 16.2 million in February. Given that analysts had been expecting a 16.5 to 16.7 million pace, February’s sales report was viewed with disappointment. Probably too much so. Just as January’s pace of 16.6 million was greeted with too much enthusiasm.

Sales rates in January and February are very sensitive to the seasonal adjustment factors. And those factors are often less than precise, due to both statistical, and actual seasonal, reasons. At best, sales during the first two months of 2015 suggest a pause after last year’s strong close. At worst, it may be evidence of the more cautious consumer behavior exhibited in overall retail sale activity for some time. In either case, it’s likely temporary.

From a used vehicle residual standpoint, it is important to note that February’s sales disappointment did not elicit aggressive promotions. Kelley Blue Book reported that average new vehicle transaction prices in February increased 3.6% (or $1,145) from their year-ago level. Autodata reported that average per-vehicle incentive spending declined 1% from a year ago.

Although aggregate inventory levels are not overly worrisome, the weaker-than-expected sales pace did cause greater imbalance. Refreshingly, some manufacturers have decided to slow production rather than force the market.

Used vehicles: steady sales, strong profits. Most dealers continued to report good operating results in their used vehicle departments. Lease returns and newer trade-ins are providing a wider mix of offerings, and dealers have been optimizing inventory to make the most of it. CPO sales rose 10.3% in February. That, combined with January’s increase of 17%, produced year-to-date CPO sales of more than 392,300 units, up 13.6% from 2014’s record pace.

Weekly tax refunds slow. Individual tax refunds disbursed in the first week of February totaled $39.3 billion. In the second week that slipped to $33.6 billion, and in the third week it dropped off to $24.5 billion. Total refunds during the first three weeks of February were down 13.8%, or $15.7 billion, from their year-ago level. Other than some marginal weakness in lower-priced used units, there appeared to be little direct impact to the auto industry from the reduced level of refunds.

Rental risk volumes (and mileage) rise. Mix-adjusted auction prices for rental risk units sold in February improved slightly from January, but were down relative to last year’s high levels. Volumes were high in February. So, too, was the average mileage on the units, which rose to more than 48,500 miles.

Market segment trends. Compact cars have been the weakest segment in terms of wholesale pricing in recent months, as well as over the past year. That’s not surprising given slow sales and a high days’ supply on the new vehicle side. Pricing for cargo vans continued to be very strong.

Index Release Dates

Manheim Consulting releases the latest update of its Used Vehicle Value Index on the fifth business day of each month. To receive a monthly reminder about this update, as well as reminders for Tom Webb's quarterly conference calls, please email manheimindex@ketchum.com.

Manheim Consulting Blog

Used Car Market Report

The Manheim annual Used Car Market report examines the economic underpinnings of the entire used vehicle market and sector-specific trends that influence the supply and pricing of used vehicles.

This report highlights market conditions and buyer and seller strategies within the used vehicle marketplace, provides an update on digital and mobile technology developments. It also includes an annual look at the various industry components, including dealer, rental, repossessions, leasing, and salvage.

Where to Find Us

Services

Manheim Consulting: Your Partner for Remarketing Services

Manheim Consulting is dedicated to helping our Commercial and Dealer customer improve their remarketing performance. Our team accesses the extensive database represented by the more than 10 million vehicles posted annually online or run in Manheim auction lanes. We apply data mining, targeted research, competitive benchmarking, and quantitative analyses to provide our clients with unbiased reporting and strategic advice.

Powered by Professionals

Manheim Consulting is built on the knowledge and experience of its team of consultants. Over the years, Manheim Consulting has established itself as a trusted advisor to the automotive industry. Professionals from a diverse set of backgrounds help develop a perspective that is truly unparalleled in the industry.

Our Team

Tom WebbChief Economist

Tom Webb joined Manheim as chief economist in 2001, bringing to the position his unique understanding of the automotive retail and wholesale industries. As the chief economist for the National Automobile Dealers Association for 26 years, Tom was already recognized for his authoritative research and commentary on economic trends and their impact on vehicle demand. At Manheim, Tom continues in his role as commentator on the economy and vehicle markets and is a frequent guest at Manheim client and automotive events, in the media and as a contributor to automotive and remarketing publications.

Tom has a degree in Economics from the University of Wyoming and did graduate work in Economics at Georgetown University.

Nancy HillSenior Manager, Customer Consulting

Nancy Hill joined Manheim Consulting in 2006 and has over 13 years’ experience in the automotive remarketing industry. Her experience includes consulting with customers in the bank, rental, captive finance, dealer and commercial fleet segments, leading initiatives to help improve remarketing strategies. Key projects include recon ROI analysis, footprint optimization, and optimal location recommendations. Additionally, Nancy authored several studies, covering topics such as location/sale day consolidation, rental detail ROI, and understanding which vehicles have the highest success rates in online sales.

Nancy has a Bachelor of Arts from the University of Georgia and an MBA from Mercer University.

John RadcliffeSenior Manager, Customer Consulting

John Radcliffe joined Manheim Consulting in 2009 and has over 15 years of automotive industry experience. John currently helps large dealer groups become more efficient in the remarketing industry by providing custom analytics, peer benchmarking, ROI analysis, market research, and industry trends. Prior to joining Manheim, John worked for Chevy Chase Bank as a senior loan officer specializing in retail and commercial lending in the automotive industry.

John holds a Bachelor of Arts in Accounting from the University of West Florida and an MBA from Keller School of Management in Chicago.